For freelancers & the self-employed

Home office deduction calculator

There are two ways to write off a home office, and they can give very different answers. Enter your space and expenses once, and we'll calculate both methods and tell you which one saves you more.

Reviewed for accuracy by [Reviewer Name], CPA · Updated for tax year 2026 · How this is calculated · Estimates pending CPA review

The two ways to deduct a home office

If you're self-employed and use part of your home regularly and exclusively for your business, you can deduct the cost of that space. The IRS gives you two methods, and you may pick whichever is larger each year. This calculator runs both at once so you don't have to guess.

The simplified method

The simplified option is a flat $5 per square foot of office space, up to 300 square feet — a maximum deduction of $1,500 a year. There's no need to track individual bills or calculate depreciation. For a small office or a renter with modest costs, it's often the easier and sometimes larger choice.

The actual-expense method

The actual-expense method deducts the business-use percentage of your real home costs. You divide your office square footage by your home's total square footage to get that percentage, then apply it to eligible expenses: rent or mortgage interest, utilities, insurance, and repairs. A 150 sq ft office in a 1,200 sq ft home is 12.5% — so you could deduct 12.5% of those home costs. When rent is high or your office is a large share of your home, this method usually wins. See IRS Form 8829 and Publication 587.

Which should you use?

Whichever is bigger — and you can switch year to year. The simplified method wins on paperwork; the actual method often wins on dollars if you have real housing costs. The calculator above shows both and highlights the larger one. One caution the tool keeps conservative: your home office deduction generally can't create or increase a business loss, so it's limited to your business income for the year.

Put the savings to work: a bigger deduction lowers the income your self-employed tax calculator runs on, which lowers what you set aside each quarter. Pair this with our 1099 deductions guide to catch the rest.

Frequently asked questions

How is the simplified deduction calculated? $5 per square foot of office space, capped at 300 square feet, for a maximum of $1,500 per year — no receipts required.

What counts as an actual expense? Rent or mortgage interest, utilities, homeowners or renters insurance, and repairs that benefit the whole home, prorated by your business-use percentage. Direct costs that only benefit the office can sometimes be deducted in full.

Who qualifies? You must use the space regularly and exclusively for your self-employment work, and it should be your principal place of business. W-2 employees can't claim this deduction on their federal return.

Related tools: Self-employed tax calculator · Quarterly tax calculator · 1099 vs W-2 calculator · 1099 deductions guide

Educational estimate — not tax advice. This tool applies simplified 2026 rules: the $5/sq ft simplified rate (300 sq ft cap) and a straight square-footage proration for the actual method. It does not calculate home depreciation, the business-income limitation that can cap your deduction, direct vs. indirect expense splits, or state rules, and it assumes the space is used exclusively for business. Figures are current-year estimates pending final CPA review. Your actual deduction depends on your specific situation and is not a substitute for a CPA, EA, or the IRS. Everything is calculated entirely in your browser — nothing you type is stored or sent anywhere.